Section 140 of NIA : Section 140: Defence Which May Not Be Allowed In Any Prosecution Under Section 138

Explanation using Example

Imagine John issues a cheque to Rachel for the payment of goods delivered. John believes his account has enough funds, but he does not check his balance before issuing the cheque. Unfortunately, the cheque bounces due to insufficient funds. Rachel decides to take legal action against John under Section 138 of the Negotiable Instruments Act, 1881 for the dishonoured cheque.

In court, John cannot use as a defence that he believed he had enough money and had no reason to think the cheque would bounce. Section 140 clearly states that the belief of the drawer regarding the sufficiency of funds is not a valid defence in a prosecution under Section 138. Therefore, John's belief does not exempt him from legal liability, and he may still be prosecuted for the offence of cheque bouncing.